The New Corporation
The media was abuzz in September as the Business Roundtable announced the creation of a new Statement on the Purpose of a Corporation. It outlines an enormous shift from the old shareholder-first thinking based on Milton Friedman’s position that “engage in activities designed to increase its profits.” The new statement describes a position that corporations have multiple stakeholders and a responsibility to deliver value to ALL – from shareholders to customer to employees to suppliers. A year in the making, it might be represented in a graphic like this.The critics are ready though. Many believe that shareholders will now be served last. Others think nothing will change as there were no policy changes proposed. The truth is that this is not a new concept. It’s been slowly emerging and evolving over time with early work from MIT on the Shareholder vs. Stakeholder debate and people like Michael Porter of Harvard on Shared Value. Raj Sisodia’s writings on Conscious Capitalism focused on his research of public, private and international firms since the 1990’s who have succeeded with this approach.
Others like Josh Bersin, who writes on corporate human resources and the future of work believes that the issue runs much deeper. His research shows that social impact is a key factor and is driven by employees and consumers who will not work or buy from companies that don’t share their values.
Key Takeaways: So what can we do? Many say to keep the pressure on companies and employers who are stepping up to address the many challenges of our time. But we can also make an impact on the people we individually touch whether they be direct customers or end-users, suppliers, our own internal clients or the community at large. In addition, we can take another view of our companies through the lens of the Whole Brain® Business Model to help us understand and address the various aspects of organizations that need focus as we play our part in driving change.
Tell us your story…We’d like to hear from you on what your companies are doing to drive change and address the social issues of our time. Email me or click here to share more in the comments section on our Top Tips page. Others may learn from your story and what you share. To see a list of all the Top Tips that have been published, please see the complete blog.